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Amazon Corporate Workers Face Pay Reduction After Shares Slip

13 points by donsupreme 4y ago

PaulHoule 4y ago
I figure about $100,000 of the lost value was me diverting all my recurring AMZN bills (pillpack, AWS, ...) to other providers because they ended 2 day prime delivery to my location. I can't wait to see what happens to their stock the day they admit that prime subscriber numbers are dropping. According to some analysts that will be real soon now. https://www.businessinsider.com/amazon-shopping-prime-membership-us-stopped-growing-first-time-ever-2023-1 https://www.businessinsider.com/amazon-shopping-prime-member... Sure is penny wise and pound foolish. It's like they never heard about Azure. They should have talked w/ my AWS account rep before they made that decision.
- ericpauley 4y ago
  I don’t understand. Are you saying that Amazon should have foreseen you cancelling AWS spend because of changes to prime in your area?
  - throwaway81523 4y ago
    Spending $100K on AWS because of the feelgood of 2 day Prime delivery for unrelated products seems like a cancellation that needed doing anyway.
    - PaulHoule 4y ago
      You know the formula is [earnings] x [earning multiple] = [stock price] When the earning multiplier is between 50-100 for AMZN in recent times. If the multiplier is 100, $1000 a year in earnings translates to $100,000 change in the stock price. So I am talking about a much smaller than $100,000 spend. But seriously. Say AMZN had slowed delivery to NYC and LA down to 5 days and sped it up to the heartland to 1 day. Jim Cramer would be talking about it all the time on CNBC, it would be a running gag on sitcoms that AMZN is slow. Nobody would be crowing about how great their service is because people in the heartland don't have a voice. But my congressman gets 1 day service in DC and will vote for anything AMZN wants because he thinks we are getting 1 day too. Maybe I am making too much of it but there is something psychologically dangerous about a "premium" service that is worse than average as opposed to better than average. It's like Medium. I find Prime now is such an insult to my intelligence and is one of just a series of such events (like them telling me they don't care about bogus product listings) that I just want to cause as much pain to AMZN as I can.
      - bradknowles 4y ago
        With respect, even if you're spending millions of dollars per year on Amazon or AWS, you're still not a whale. More like a minnow. You need to add at least a couple more zeros to that number before you start to get close to whale territory.
    - ericpauley 4y ago
      I think the greatest puzzler here is that 100k AWS spend is “whale” territory.
  - PaulHoule 4y ago
    Yes. I'm a whale. They could certainly flip a flag in the database to treat me accordingly. If they showed some sign of listening to any of my concerns it would be different but if it is "talk to the hand" and sending me spam emails trying to gaslight me about "the benefits of prime" all I can do is cut off every dollar I can to them. And it's not just me. AMZN has been counting on people letting their Prime subscriptions auto-renew and I'm not the only one who comes to this conclusion. Other people posting about AMZN's problems over a long time also helped me make my decision and like a contagion I'm sure I will help others make that decision. Personally I find the Prime changes insulting for this reason: They want me to believe "Prime" is a premium service worth paying for, but "Prime" is now slower than all other online retailers, including getting packages shipped from Japan. A "Premium" product is supposed to be better than the alternatives, not worse. I feel like I am being spit on that they suppose I am stupid enough to fall for it. They also sped service up to the big media cities so whenever I turn on the TV I hear about people who are delighted to be getting 1 day deliveries, which also pisses me off -- it's an insult that just keeps getting repeated. To be fair I have been falling out of love with AMZN for a long time and the Azure move has been coming a long time
    - ericpauley 4y ago
      There may be some details missing here, but the idea that Amazon would shift regional consumer goods logistics pipelines to appease someone who works at a 100k/year (or less? This is hardly “whale” territory) cloud spend customer is just not realistic.
    - catchnear4321 4y ago
      > Yes, I’m a whale AWS and Amazon.com - You really think those two groups have good communication lines? Good enough to deal with some brine shrimp that thinks $100k is a lot?
wdb 4y ago
That’s why you should consider it an extra and not a given. They don’t really face a ‘reduction’ in my opinion.
- rmk 4y ago
  It's certainly a reduction because, until very recently, Amazon had a maximum salary number that was quite low. Therefore, stock was used to achieve parity with market rates. However the stock was issued under the assumption that it would mostly hold its value, which has been untrue for the past year. This is no different from GS and other finance companies paying out a large chunk of the compensation in 'bonuses'. If they decide to cut the 'bonuses', employees no longer have market parity and it's effectively a pay cut for them. Of course people should be cautious about picking companies that structure compensation this way, but the expectation that has built up over the years is that the stock is as good as actual cash. Perhaps that expectation will be reset as a result of these mass layoffs at these companies.
  - wdb 4y ago
    Yes, but bonuses is not something you can depend on so as an employee you shouldn't include it to compare market parity in my opinion. But I am someone that never was never getting the employer's suggested bonuses (never the full but maybe like 20%) because of 'bad company performance' or 'bad market performance'.
    - rmk 4y ago
      That's my point exactly. For some industries/companies, a 'bonus' is actually de-facto 'regular' compensation, same as stock.
phendrenad2 4y ago
In other news, those who invested in the stock market face "pay reduction" because their stocks went down.
- cyanydeez 4y ago
  Better scrap the last 50 years of privatization as low-key racism.
whateveracct 4y ago
Always sell your shares when they vest! You are extra exposed to employee trouble. Would you buy that much employer stock if you had the cash?
- prng2021 4y ago
  Wow. Never take financial advice from a stranger. Look at the AMZN stock performance from 1997 to 2022. How many people could have sold right after vesting, invested the money elsewhere, and beat the gains that would have been had, had they held onto AMZN? Yes 1997-2022 is a super long time, but you can look at just about any 10 year time span within that range. Selling right after vesting would have been a poor decision for most stocks over the 10 year time span from 2012 to 2022. So no, I don't agree with the advice to "always" sell right after vesting.
  - whateveracct 4y ago
    That's just hindsight imo. Shit could've dipped at any point for market or amazon-specific reasons. Would you have bought 10s of thousands dollars of AMZN? Probably not. That's how you evaluate it. I've always sold and never regretted and I ended up plenty wealthy. Also - anyone still sitting on their shares would've gotten hosed by your advice per the above article. Your take seems to sum up to "time the market"
    - prng2021 4y ago
      No, my point was that always selling at vesting is not good advice. If you were a long term investor and held onto AMZN over a 10 year or longer time span, you would have most likely been way better off than just selling at vest and doing something else with that money. That's the complete opposite of trying to time the market.
      - whateveracct 4y ago
        You'd have to be pretty high on Amazon to bundle its risk with your only income. If you don't open yourself to getting double-screwed, you can use that risk somewhere else. I guess we are just talking about diversification here.

13 points by donsupreme 4y ago

I figure about $100,000 of the lost value was me diverting all my recurring AMZN bills (pillpack, AWS, ...) to other providers because they ended 2 day prime delivery to my location. I can't wait to see what happens to their stock the day they admit that prime subscriber numbers are dropping. According to some analysts that will be real soon now. https://www.businessinsider.com/amazon-shopping-prime-membership-us-stopped-growing-first-time-ever-2023-1 https://www.businessinsider.com/amazon-shopping-prime-member... Sure is penny wise and pound foolish. It's like they never heard about Azure. They should have talked w/ my AWS account rep before they made that decision.

ericpauley 4y ago
I don’t understand. Are you saying that Amazon should have foreseen you cancelling AWS spend because of changes to prime in your area?
- throwaway81523 4y ago
  Spending $100K on AWS because of the feelgood of 2 day Prime delivery for unrelated products seems like a cancellation that needed doing anyway.
  - PaulHoule 4y ago
    You know the formula is [earnings] x [earning multiple] = [stock price] When the earning multiplier is between 50-100 for AMZN in recent times. If the multiplier is 100, $1000 a year in earnings translates to $100,000 change in the stock price. So I am talking about a much smaller than $100,000 spend. But seriously. Say AMZN had slowed delivery to NYC and LA down to 5 days and sped it up to the heartland to 1 day. Jim Cramer would be talking about it all the time on CNBC, it would be a running gag on sitcoms that AMZN is slow. Nobody would be crowing about how great their service is because people in the heartland don't have a voice. But my congressman gets 1 day service in DC and will vote for anything AMZN wants because he thinks we are getting 1 day too. Maybe I am making too much of it but there is something psychologically dangerous about a "premium" service that is worse than average as opposed to better than average. It's like Medium. I find Prime now is such an insult to my intelligence and is one of just a series of such events (like them telling me they don't care about bogus product listings) that I just want to cause as much pain to AMZN as I can.
    - bradknowles 4y ago
      With respect, even if you're spending millions of dollars per year on Amazon or AWS, you're still not a whale. More like a minnow. You need to add at least a couple more zeros to that number before you start to get close to whale territory.
  - ericpauley 4y ago
    I think the greatest puzzler here is that 100k AWS spend is “whale” territory.
- PaulHoule 4y ago
  Yes. I'm a whale. They could certainly flip a flag in the database to treat me accordingly. If they showed some sign of listening to any of my concerns it would be different but if it is "talk to the hand" and sending me spam emails trying to gaslight me about "the benefits of prime" all I can do is cut off every dollar I can to them. And it's not just me. AMZN has been counting on people letting their Prime subscriptions auto-renew and I'm not the only one who comes to this conclusion. Other people posting about AMZN's problems over a long time also helped me make my decision and like a contagion I'm sure I will help others make that decision. Personally I find the Prime changes insulting for this reason: They want me to believe "Prime" is a premium service worth paying for, but "Prime" is now slower than all other online retailers, including getting packages shipped from Japan. A "Premium" product is supposed to be better than the alternatives, not worse. I feel like I am being spit on that they suppose I am stupid enough to fall for it. They also sped service up to the big media cities so whenever I turn on the TV I hear about people who are delighted to be getting 1 day deliveries, which also pisses me off -- it's an insult that just keeps getting repeated. To be fair I have been falling out of love with AMZN for a long time and the Azure move has been coming a long time
  - ericpauley 4y ago
    There may be some details missing here, but the idea that Amazon would shift regional consumer goods logistics pipelines to appease someone who works at a 100k/year (or less? This is hardly “whale” territory) cloud spend customer is just not realistic.
  - catchnear4321 4y ago
    > Yes, I’m a whale AWS and Amazon.com - You really think those two groups have good communication lines? Good enough to deal with some brine shrimp that thinks $100k is a lot?

wdb 4y ago

That’s why you should consider it an extra and not a given. They don’t really face a ‘reduction’ in my opinion.

rmk 4y ago
It's certainly a reduction because, until very recently, Amazon had a maximum salary number that was quite low. Therefore, stock was used to achieve parity with market rates. However the stock was issued under the assumption that it would mostly hold its value, which has been untrue for the past year. This is no different from GS and other finance companies paying out a large chunk of the compensation in 'bonuses'. If they decide to cut the 'bonuses', employees no longer have market parity and it's effectively a pay cut for them. Of course people should be cautious about picking companies that structure compensation this way, but the expectation that has built up over the years is that the stock is as good as actual cash. Perhaps that expectation will be reset as a result of these mass layoffs at these companies.
- wdb 4y ago
  Yes, but bonuses is not something you can depend on so as an employee you shouldn't include it to compare market parity in my opinion. But I am someone that never was never getting the employer's suggested bonuses (never the full but maybe like 20%) because of 'bad company performance' or 'bad market performance'.
  - rmk 4y ago
    That's my point exactly. For some industries/companies, a 'bonus' is actually de-facto 'regular' compensation, same as stock.

phendrenad2 4y ago

In other news, those who invested in the stock market face "pay reduction" because their stocks went down.

cyanydeez 4y ago
Better scrap the last 50 years of privatization as low-key racism.

whateveracct 4y ago

Always sell your shares when they vest! You are extra exposed to employee trouble. Would you buy that much employer stock if you had the cash?

prng2021 4y ago
Wow. Never take financial advice from a stranger. Look at the AMZN stock performance from 1997 to 2022. How many people could have sold right after vesting, invested the money elsewhere, and beat the gains that would have been had, had they held onto AMZN? Yes 1997-2022 is a super long time, but you can look at just about any 10 year time span within that range. Selling right after vesting would have been a poor decision for most stocks over the 10 year time span from 2012 to 2022. So no, I don't agree with the advice to "always" sell right after vesting.
- whateveracct 4y ago
  That's just hindsight imo. Shit could've dipped at any point for market or amazon-specific reasons. Would you have bought 10s of thousands dollars of AMZN? Probably not. That's how you evaluate it. I've always sold and never regretted and I ended up plenty wealthy. Also - anyone still sitting on their shares would've gotten hosed by your advice per the above article. Your take seems to sum up to "time the market"
  - prng2021 4y ago
    No, my point was that always selling at vesting is not good advice. If you were a long term investor and held onto AMZN over a 10 year or longer time span, you would have most likely been way better off than just selling at vest and doing something else with that money. That's the complete opposite of trying to time the market.
    - whateveracct 4y ago
      You'd have to be pretty high on Amazon to bundle its risk with your only income. If you don't open yourself to getting double-screwed, you can use that risk somewhere else. I guess we are just talking about diversification here.